Stablecoins Don’t Have a Tech Problem, They Have a Trust Problem

What the Bank of England’s Stablecoin Rules Tell Us About the Future of Digital Money 

The Bank of England’s latest policy statement and proposed rules for regulating systemic stablecoins have understandably been viewed as another regulatory milestone. I think they tell us something much more interesting about the future of digital money. 

At first glance, the announcement is about stablecoins. Look a little closer, though, and it’s really about the questions regulators are beginning to ask. They’re asking less about whether the technology works and more about whether people can rely on it. How are reserves managed? How does redemption work? Who is accountable if something goes wrong? How resilient is the infrastructure? 

That’s the real shift. 

A few years ago, conversations about stablecoins centred on blockchain, programmability, faster settlement and new payment rails. Those innovations remain important, but they no longer define the debate. As stablecoins move closer to mainstream financial services, the questions shaping their future are the same ones that have shaped payments for decades: can people trust them, can they rely on them and what happens when things don’t go according to plan? 

The original promise of stablecoins was straightforward: create a faster, cheaper and more open way to move money. That promise hasn’t changed. What has changed is the realisation that building the technology was only the beginning. 

Having spent much of my career developing banking products and payment propositions, I’ve seen this pattern before. Every meaningful financial innovation eventually reaches the point where the technology becomes expected. From that point on, success depends much less on what the technology can do and much more on whether people have confidence in using it. Looking at the Bank of England’s announcement, I think stablecoins are reaching that point now.  

Building the technology was only the beginning 

Stablecoins are often described as digital cash, but they’re perhaps easier to think of as digital tokens backed by real-world money. Imagine handing £100 to a casino and receiving £100 worth of chips. The chips aren’t money themselves, but because they’re backed by your deposit, they retain the same value and can be exchanged whenever you choose. Stablecoins work in much the same way, except those digital tokens move across blockchain networks instead of traditional payment infrastructure. 

It’s easy to see why that idea generated so much excitement. Faster settlement, programmable payments and the ability to move value without many of the constraints of traditional payment rails offered a genuinely different way of thinking about payments. Those advantages remain compelling, but I don’t think they’ll define what happens next.

Look at the questions people are asking today and the conversation feels very different. Businesses want to understand where reserves are held, how redemption works, who stands behind the issuer and how risks are managed. Regulators want assurance that the system is resilient. Consumers simply want to know their money is safe. They’re not questioning the technology itself; they’re asking what sits around it. Those are the same questions every successful payment innovation has eventually had to answer. 

That’s what struck me about the Bank of England’s announcement. It doesn’t dismiss the technology; it simply recognises that making digital money part of everyday life depends on much more than proving the technology works. 

The next challenge is proving it can be trusted 

Read the Bank of England’s proposals closely and a pattern begins to emerge. The questions they’re trying to answer are very different from the ones that dominated the early days of stablecoins. Back then, the focus was on proving the technology could work. Today, the challenge is proving people can rely on it. 

That’s ultimately the standard stablecoins will be judged against. People don’t stop to think about the technology behind a card payment or bank transfer; they simply expect it to work. Stablecoins will be judged in exactly the same way. 

The proposals devote significant attention to reserves, redemption, safeguarding, operational resilience and accountability. Those aren’t the features that make stablecoins more innovative; they’re the things that make them usable at scale. 

Throughout my career, I’ve watched technically impressive products struggle because confidence arrived too slowly. I’ve also seen relatively straightforward innovations become part of everyday life because people understood who stood behind them and what protections existed if things didn’t go to plan. Customers rarely ask whether the technology is elegant. They want to know who is accountable and whether they can depend on it. 

That’s why I see the Bank of England’s framework as a sign of maturity rather than constraint. To me, it signals that stablecoins are moving into a new phase. The conversation is no longer just about what the technology can do. It’s increasingly about what needs to sit around that technology if digital money is to become part of everyday financial life. 

Regulation is redrawing the map 

The Bank of England’s proposals also tell us something else about the future of digital money. We’re unlikely to end up with one universal model for stablecoins. Instead, we’re starting to see different regions shaping digital money in different ways. 

Stablecoins were designed to remove borders. Regulation is beginning to redraw them. 

Europe has MiCA. The United States is developing its own framework. The UK is taking a different approach again. Rather than converging on a single global model, we’re seeing different regulatory approaches emerge, each reflecting its own priorities around financial stability, competition and consumer protection. 

For me, that’s a much bigger shift than it might first appear. 

If that continues, the winners may not simply be the organisations issuing the largest stablecoins or building the fastest blockchain. They’ll be the ones that make these different regulatory worlds work together while hiding that complexity from customers. Interoperability could become a more valuable competitive advantage than blockchain itself. 

There’s an irony in all of this. Stablecoins were originally designed to make moving value across borders simpler. Yet their long-term success may increasingly depend on how well they adapt to the different rules being created on either side of those borders.  

The future of digital money 

For me, that’s the real significance of the Bank of England’s announcement. 

I don’t think the Bank is simply responding to another financial innovation. It’s recognising that digital money is entering a new phase of its evolution. The biggest questions are no longer just about what the technology can do; they’re about what needs to sit around that technology if people are going to use it with confidence every day. 

The irony is that stablecoins were originally designed to sit outside many of the conventions of traditional finance. Yet their long-term success may increasingly depend on adopting many of the same principles that made traditional payments work in the first place. 

Perhaps that’s the biggest lesson from the Bank of England’s announcement. The future of digital money won’t simply be shaped by the technology that powers it. It will be shaped by the confidence people have in using it and the institutions that earn that confidence over time.